The world’s demand for electricity is rising at its fastest rate in years, driven by robust economic growth, intense heatwaves, and the increasing use of electric technologies such as electric vehicles (EVs) and heat pumps, according to a new report by the International Energy Agency (IEA). Concurrently, renewables are rapidly expanding, with solar PV on course to set new records.
Global electricity demand is forecast to grow by around 4% in 2024, up from 2.5% in 2023, according to the IEA’s Electricity Mid-Year Update. This marks the highest annual growth rate since 2007, excluding exceptional rebounds after the global financial crisis and the Covid-19 pandemic. The report projects this strong increase in electricity consumption to continue into 2025, with another 4% growth expected.
Renewable energy sources are set to expand rapidly, with their share of global electricity supply forecast to rise from 30% in 2023 to 35% in 2025. By 2025, electricity generated by renewables is expected to surpass that generated by coal for the first time. Solar PV alone is predicted to meet roughly half of the growth in global electricity demand between 2024 and 2025, with solar and wind combined accounting for up to three-quarters of this growth.
Despite the surge in renewables, global power generation from coal is unlikely to decline this year due to the strong demand growth, particularly in China and India. Consequently, carbon dioxide (CO2) emissions from the global power sector are plateauing, with a slight increase in 2024 followed by a decline in 2025. However, if Chinese hydropower production continues its strong recovery from 2023, it could reduce coal-fired power generation and result in a slight decline in global power sector emissions in 2024.
Major economies are experiencing significant increases in electricity consumption. India’s demand is expected to surge by 8% this year, driven by strong economic activity and powerful heat waves. China is also projected to see demand growth of more than 6%, due to robust activity in the services and industrial sectors, including clean energy technology manufacturing.
In the United States, after a decline in 2023 due to mild weather, electricity demand is forecast to rebound by 3% this year amid steady economic growth, rising cooling demand, and an expanding data centre sector. In contrast, the European Union will see a more modest recovery, with growth forecast at 1.7%, following two years of contraction due to the energy crisis.
Increasing use of air-conditioning in response to intense heatwaves remains a significant driver of electricity demand in many parts of the world. Multiple regions faced intense heat waves in the first half of 2024, elevating demand and straining electricity systems.
Growth in global electricity demand this year and next is set to be among the fastest in the past two decades, highlighting the growing role of electricity in our economies as well as the impacts of severe heatwaves,
said Keisuke Sadamori, IEA Director of Energy Markets and Security.
It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals. At the same time, it’s crucial to expand and reinforce grids to provide citizens with a secure and reliable electricity supply – and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems.
The rise of artificial intelligence (AI) is drawing attention to the electricity demand of data centres, emphasizing the need for reliable data and better stocktaking measures. The report notes uncertainties regarding the electricity demand of data centres, including deployment pace, AI uses, and potential energy efficiency improvements. Accurate data collection on electricity consumption in the data centre sector is essential to understand past developments and future trends.
News Source: Emirates News Agency
